Revenues for the second quarter of fiscal 2017 were $11.0 million, compared with $18.5 million for the same period of fiscal 2016. Revenues in both the Wind and Grid segments decreased year-over-year.

AMSC's net loss for the second quarter of fiscal 2017 was $7.3 million, or $0.38 per share, compared to $7.3 million, or $0.53 per share, for the same period of fiscal 2016. The Company's non-GAAP net loss for the second quarter of fiscal 2017 was $8.3 million, or $0.44 per share, compared with a non-GAAP net loss of $8.2 million, or $0.60 per share, in the same period of fiscal 2016. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

Cash, cash equivalents and restricted cash on September 30, 2017 totaled $30.5 million, compared with $37.7 million at June 30, 2017.

"Our financial performance in the second quarter was at the middle of our expected range," said Daniel P. McGahn, President and CEO, AMSC. "We are pleased to see the wind market in India improving. We expect stronger revenues in the second half of fiscal 2017 for both our Wind and Grid segments."

Business OutlookFor the third quarter ending December 31, 2017, AMSC expects that its revenues will be in the range of $14.0 million to $18.0 million. The Company's net loss for the third quarter of fiscal 2017 is expected to be less than $8.0 million, or $0.40 per share. The Company's non-GAAP net loss (as defined below) is expected to be less than $7.6 million, or $0.38 per share. The Company expects a cash burn of $8.0 million to $9.0 million in the third quarter of fiscal 2017, including a $1.0 million capital investment related to the Massachusetts move anticipated to occur in the third quarter.

Conference Call ReminderIn conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time on Wednesday, November 8th to discuss the Company's financial results and business outlook. Those who wish to listen to the live or archived conference call webcast should visit the "Investors" section of the Company's website at http://www.amsc.com/investors. The live call also can be accessed by dialing 800-289-0438 and using conference ID 7795162.

About AMSC (NASDAQ:AMSC)AMSC generates the ideas, technologies and solutions that meet the world's demand for smarter, cleaner … better energy™. Through its Windtec™ Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance. The Company's solutions are now powering gigawatts of renewable energy globally and are enhancing the performance and reliability of power networks in more than a dozen countries. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America. For more information, please visit www.amsc.com.

AMSC, Windtec, Gridtec, and Smarter, Cleaner … Better Energy are trademarks or registered trademarks of American Superconductor Corporation. All other brand names, product names, trademarks or service marks belong to their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements in this release about our expectation that our Wind and Grid segments will generate stronger revenues in the second half of fiscal 2017, our expected financial results for the quarter ending September 30, 2017, our expected cash burn during the quarter ending September 30, 2017, our anticipated move of our Devens facility, and other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent management's current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: A significant portion of our revenues are derived from a single customer, Inox; We have a history of operating losses and negative operating cash flows, which may continue in the future and require us to secure additional financing in the future; Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; Our financial condition may have an adverse effect on our customer and supplier relationships; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; We rely upon third-party suppliers for the components and sub-assemblies of many of our Wind and Grid products, making us vulnerable to supply shortages and price fluctuations; Failure to successfully execute any move of our Devens, Massachusetts manufacturing facility or achieve expected savings following any move could adversely impact our financial performance; We may not realize all of the sales expected from our backlog of orders and contracts; Our success depends upon the commercial use of high temperature superconductor products, which is currently limited, and a widespread commercial market for our products may not develop; Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy; We have operations in and depend on sales in emerging markets, including India, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these markets; We face risks related to our intellectual property; We face risks related to our legal proceedings; and the important factors discussed under the caption "Risk Factors" in Part 1. Item 1A of our Form 10-K for the fiscal year ended March 31, 2017, and our other reports filed with the SEC. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

2017

2016

2017

2016

Revenues

Wind

$

5,554

$

12,898

$

7,831

$

18,573

Grid

5,495

5,609

12,140

13,279

Total revenues

11,049

18,507

19,971

31,852

Cost of revenues

10,777

16,404

24,186

28,886

Gross margin

272

2,103

(4,215

)

2,966

Operating expenses:

Research and development

2,951

2,867

5,667

5,819

Selling, general and administrative

5,339

6,347

11,477

13,563

Amortization of acquisition-related intangibles

—

39

13

78

Change in fair value of contingent consideration

(201

)

—

(201

)

—

Restructuring

(12

)

—

1,328

—

Total operating expenses

8,077

9,253

18,284

19,460

Operating loss

(7,805

)

(7,150

)

(22,499

)

(16,494

)

Change in fair value of warrants

144

1,244

1,069

567

Gain on sale of minority interest

951

—

951

—

Interest income (expense), net

54

(107

)

45

(243

)

Other expense, net

(796

)

(518

)

(2,170

)

(393

)

Loss before income tax (benefit) expense

(7,452

)

(6,531

)

(22,604

)

(16,563

)

Income tax (benefit) expense

(171

)

794

(71

)

1,117

Net loss

$

(7,281

)

$

(7,325

)

$

(22,533

)

$

(17,680

)

Net loss per common share

Basic

$

(0.38

)

$

(0.53

)

$

(1.26

)

$

(1.29

)

Diluted

$

(0.38

)

$

(0.53

)

$

(1.26

)

$

(1.29

)

Weighted average number of common shares outstanding

Basic

19,060

13,769

17,925

13,723

Diluted

19,060

13,769

17,925

13,723

UNAUDITED CONSOLIDATED BALANCE SHEET

(In thousands, except per share data)

September 30, 2017

March 31, 2017

ASSETS

Current assets:

Cash and cash equivalents

$

30,320

$

26,784

Accounts receivable, net

8,193

7,956

Inventory

15,983

17,462

Prepaid expenses and other current assets

3,323

2,703

Restricted cash

—

795

Total current assets

57,819

55,700

Property, plant and equipment, net

36,438

43,438

Intangibles, net

3,496

301

Goodwill

1,711

—

Restricted cash

165

165

Deferred tax assets

538

407

Other assets

381

233

Total assets

$

100,548

$

100,244

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

14,016

$

14,490

Note payable, current portion, net of discount of $19 as of March 31, 2017

—

1,481

Derivative liabilities

1,224

1,923

Deferred revenue

16,069

14,323

Total current liabilities

31,309

32,217

Deferred revenue

8,325

7,631

Deferred tax liabilities

125

125

Other liabilities

137

45

Total liabilities

39,896

40,018

Stockholders' equity:

Common stock

211

147

Additional paid-in capital

1,039,458

1,017,510

Treasury stock

(1,645

)

(1,371

)

Accumulated other comprehensive income (loss)

718

(503

)

Accumulated deficit

(978,090

)

(955,557

)

Total stockholders' equity

60,652

60,226

Total liabilities and stockholders' equity

$

100,548

$

100,244

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Six Months Ended September 30,

2017

2016

Cash flows from operating activities:

Net loss

$

(22,533

)

$

(17,680

)

Adjustments to reconcile net loss to net cash used in operations:

Depreciation and amortization

7,682

3,735

Stock-based compensation expense

1,232

1,653

Provision for excess and obsolete inventory

351

671

Gain on sale of minority interest

(951

)

—

Change in fair value of warrants and contingent consideration

(1,270

)

(567

)

Non-cash interest expense

19

98

Other non-cash items

(97

)

(103

)

Changes in operating asset and liability accounts:

Accounts receivable

124

7,118

Inventory

1,354

(8,696

)

Prepaid expenses and other current assets

85

2,843

Accounts payable and accrued expenses

(770

)

(4,481

)

Deferred revenue

1,235

4,497

Net cash used in operating activities

(13,539

)

(10,912

)

Cash flows from investing activities:

Net cash provided by/(used in) investing activities

1,279

(368

)

Cash flows from financing activities:

Net cash provided by/(used in) financing activities

15,188

(2,490

)

Effect of exchange rate changes on cash and cash equivalents

608

(298

)

Net increase/(decrease) in cash and cash equivalents

3,536

(14,068

)

Cash and cash equivalents at beginning of year

26,784

39,330

Cash and cash equivalents at end of year

$

30,320

$

25,262

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)

(In thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

2017

2016

2017

2016

Net loss

$

(7,281

)

$

(7,325

)

$

(22,533

)

$

(17,680

)

Sale of minority investments

(951

)

—

(951

)

—

Stock-based compensation

478

653

1,232

1,653

Amortization of acquisition-related intangibles

—

39

13

78

Consumption of zero cost-basis inventory

(340

)

(482

)

(396

)

(640

)

Change in fair value of warrants and contingent consideration

(346

)

(1,244

)

(1,270

)

(567

)

Non-cash interest expense

—

42

19

98

Tax effect of adjustments

114

77

123

102

Non-GAAP net loss

$

(8,326

)

$

(8,240

)

$

(23,763

)

$

(16,956

)

Non-GAAP net loss per share

$

(0.44

)

$

(0.60

)

$

(1.33

)

$

(1.24

)

Weighted average shares outstanding - basic and diluted

19,060

13,769

17,925

13,723

Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss

(In thousands, except per share data)

Three months ending

December 31, 2017

Net loss

$

(8,000

)

Stock-based compensation

700

Amortization of acquisition-related intangibles

—

Consumption of zero-cost inventory

(300

)

Tax effect of adjustments

—

Non-GAAP net loss

$

(7,600

)

Non-GAAP net loss per share

$

(0.38

)

Shares outstanding

20,100

Note: Non-GAAP net loss is defined by the Company as net loss before stock-based compensation; amortization of acquisition-related intangibles; consumption of zero cost-basis inventory; non-cash interest expense; change in fair value of warrants and contingent consideration; tax effect of adjustments; and other unusual charges. The Company believes non-GAAP net loss assists management and investors in comparing the Company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring or other charges that it does not believe are indicative of its core operating performance. The Company is not able to provide the change in fair value of warrants and contingent consideration on a forward-looking basis without unreasonable efforts because the calculation for that change is primarily driven by the closing price and volatility of the Company's stock at the end of each fiscal quarter, which cannot be reasonably estimated at this time. The Company does not expect to adjust non-GAAP net loss for non-cash interest expense in future quarters due to the repayment of the Company's term loan during the first quarter of fiscal 2017. Actual non-GAAP net loss for the fiscal quarter ending December 31, 2017, including the above adjustments, may differ materially from those forecasted in the table above.

Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP net loss is set forth in the table above.